Key Highlights

• Record total revenues of $541.0 million, up 91.2% year-over-year, with approximately 17% organic Revenue growth

• GAAP Net Income reached $47.3 million, a 1,216.2% increase, with GAAP net income Margin of 8.7%

• Adjusted EBITDA totaled $107.2 million, up 126.3%, with adjusted EBITDA margin expanding to a record 19.8%

• The company raised its full-year 2026 revenue and adjusted EBITDA margin guidance

VSE Corporation(NASDAQ:VSEC), a provider of aviation aftermarket distribution and repair services, reported record financial results for the third quarter of 2026. Total revenues reached $541.0 million, representing a 91.2% increase compared to the prior-year period, driven by both organic growth of approximately 17% and contributions from recent acquisitions, including the Precision Aviation Group (PAG) business.

Revenue and Earnings Reach New Highs

The $541.0 million in quarterly revenue reflects the combined scale of VSE's aviation aftermarket platform following the PAG acquisition. Broad-based demand, led by engine aftermarket activity across both repair and distribution channels, drove performance. GAAP net income from continuing operations reached $47.3 million, an increase of $43.7 million or 1,216.2% from the prior-year period. GAAP net income margin expanded approximately 750 basis points to 8.7%. GAAP Diluted Earnings per Share increased 776.5% to $1.49. Adjusted net income rose 128.4% to $63.8 million, with adjusted diluted EPS increasing 48.9% to $2.01. Adjusted EBITDA climbed 126.3% to $107.2 million, with the adjusted EBITDA margin expanding approximately 310 basis points to a record 19.8%.

Atech Acquisition and Integration Progress

On August 31, 2026, VSE completed the acquisition of Atech Turbine Components, a specialized maintenance, repair, and overhaul provider focused on complex hot-section components for aircraft turbine engines, primarily serving the commercial aviation and defense aftermarkets. The acquisition expanded VSE's proprietary engine repair capabilities. President and CEO John Cuomo noted that integration across the VSE and PAG businesses is advancing, with teams pursuing joint commercial opportunities, bringing more repair work in-house, and improving operational efficiency across the combined platform. These efforts are intended to deepen OEM partnerships, expand addressable markets, and support further margin expansion.

Cash Generation and Balance Sheet

The company generated $56.0 million in Operating Cash Flow and $46.6 million in free cash flow during the quarter. VSE ended Q3 2026 with an adjusted net Leverage Ratio of approximately 2.3 times. CFO Adam Cohn noted that the company expects continued free cash flow generation in the fourth quarter to support further deleveraging while maintaining flexibility for organic growth investments and disciplined acquisitions. Based on Q3 performance and momentum, VSE raised its full-year 2026 guidance for both revenue and adjusted EBITDA margin.

The Bigger Picture

VSE's Q3 2026 results reflect the transformation of the company into a scaled aviation aftermarket platform following the PAG acquisition. The 91.2% revenue increase, combined with organic growth of approximately 17%, demonstrates both the inorganic and organic dimensions of the current growth phase. The record adjusted EBITDA margin of 19.8% suggests that the company is beginning to capture synergies from the combined platform. With the Atech acquisition adding proprietary engine repair capabilities and the company's adjusted net leverage at 2.3 times, VSE is positioned to pursue additional growth opportunities while continuing to deleverage its balance sheet.